Quick Facts

Suriname’s economic dynamism remains hampered by serious institutional deficiencies that include poor governance and an inefficient, oversized public sector. Underdeveloped legal and physical infrastructure, exacerbated by political instability, continues to undermine long-term investment and the emergence of a vibrant private sector.

Economic Freedom Snapshot

2016 Economic Freedom Score: 53.8 (down 0.4 point)

Economic Freedom Status: Mostly Unfree

Global Ranking: 134th

Regional Ranking: 23rd in the South and Central America/Caribbean Region

Notable Successes: Monetary Freedom and Trade Freedom

Concerns: Rule of Law, Business Freedom, and Financial Freedom

Overall Score Change Since 2012: +1.2

Policies needed to sustain open markets are not firmly institutionalized, and protection of property rights is ineffective. Pervasive corruption continues to undermine the judicial system and the rule of law, making it harder to lay a solid foundation for lasting economic development.

Background

In 2015, former dictator and convicted narco-trafficker Desire “Dési” Bouterse of the National Democratic Party was reelected president for another five-year term. Bouterse first took power in 1980 when he led the “Sergeants Coup” that overthrew the civilian government and installed a military regime that ruled until 1987. In 2012, the legislature gave him amnesty for the 1982 murders of 15 prominent young men who had criticized the military dictatorship. In 2014, Bouterse’s son Dino pleaded guilty in New York to charges of drug trafficking and providing material support to a terrorist organization; in March 2015, he was sentenced to 16 years in prison. Suriname remains one of South America’s poorest and least-developed countries. The economy is dominated by exports of natural resources, especially alumina, oil, and gold, which are subject to boom-and-bust price fluctuations.

Pervasive corruption has fueled increases in crime, drug trafficking, and human trafficking. It infects government procurement, license issuance, land policy, and taxation. Organized criminal gangs and narco-trafficking networks continue to hamper governance and undermine the judicial system. The judiciary is susceptible to political influence. Property rights are not well protected.

The top personal income tax rate is 38 percent, and the top corporate tax rate is 36 percent. Other taxes include a property tax, a tax on dividends, and an excise tax. The overall tax burden equals 17.9 percent of total domestic income. Government spending amounts to 31.5 percent of GDP. Budget deficits have been increasing, and public debt now equals about 35 percent of total domestic output.

Despite small improvements, the regulatory framework remains unfavorable to private-sector development. Licensing requirements are burdensome, and launching a business still takes more than 100 days. The formal labor market is not fully developed, and the public sector remains a major source of employment. The state influences prices through regulations and state-owned enterprises. Electricity and water subsidies exceed 2 percent of GDP.

Suriname’s average tariff rate is 10.8 percent. Some agricultural products face high tariffs. The government screens new foreign investment. Private investment remains weak, partly because of heavy government interference in the economy. The onerous and non-transparent investment regime deters much-needed long-term foreign investment. The financial sector is underdeveloped, and credit decisions are subject to state influence.